You are the CEO of a hospital and you need to finance new advanced equipment that will cost $100,000. You have the option of a $100,000 standard loan or a discounted loan, both at a 4% annual rate with a one-year maturity date.

explain the difference between a standard loan and a discounted loan. What would the effective rate be for the discount loan? Identify which loan you would choose and the reasons why. Would your decision change if the equipment only cost $95,000? Why or why not?